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Confectionery in Hong Kong, China

Mar 2015|Pages: 63

Price: US$2,100

About this Report

Executive Summary

Chocolate Confectionery

TRENDS

With stable income, better knowledge of chocolate and extensive international travel, Hong Kong consumers began to develop a more sophisticated taste for chocolate. For sophisticated consumers chocolate is no longer a confectionery of mass consumption. Instead, it is seen as a symbol of status. This is vindicated by the rapid expansion of Godiva Chocolatier and the strong growth in performance registered by Ferrero Rocher and Lindt & Sprüngli in Hong Kong.

COMPETITIVE LANDSCAPE

Ferrero Asia Ltd led value sales with a share of 31% at the end of the review period thanks to strong brands such as Ferrero Rocher, Kinda Bueno and Kinda Chocolate. They have been present in Hong Kong for years and enjoy strong brand recognition across the city. While Ferrero Rocher is premium chocolate with elegant packaging that is perfect for gifting, Kinda is a mass chocolate brand riding a fine balance between quality and price. The former is one of the gift favourites for special occasions such as Chinese New Year while the latter is a popular snack option. Besides, while being the market leader in 2014, Ferrero Asia Ltd also witnessed the largest increase in value sales that year, jumping from HKD514 million in 2013 to HKD571 million in 2014. This strong performance is helped by Ferrero’s extensive sales network and constant marketing campaigns.

PROSPECTS

Confectionery chocolate is expected to register a CAGR of 5% over the forecast period with bagged selflines/softlines and boxed assortments leading the charge. The influx of mainland tourists is likely to provide the growth of momentum as boxed chocolate is one of the favourites for gifting. Bagged selflines/softlines is also likely to register a strong performance because it contains independent packs that enable consumers to share. Bagged selflines/softlines allows later consumption if consumers are unable to finish the product in one go.

Gum

TRENDS

Consumers have placed emphasis on the health benefits of gum on top of flavour. Rather than being a breath freshener gum that provides functional benefits such as whitening teeth, strengthening teeth and overall oral hygiene gained popularity in 2014. Gum registered lower retail value growth in 2014 than in 2013 due to relatively low product innovation and marketing budgets of the major players.

COMPETITIVE LANDSCAPE

Wrigley’s value share declined slightly in 2014 although the company was expected to sustain its lead with 97%. The established presence of the player was the key contributor to its performance in 2014 with consumers’ strong familiarity with the product quality offered. Regular innovations also supported the player’s leadership throughout the review period.

PROSPECTS

Over the forecast period, gum is expected to register a CAGR of 3%. With the increasing maturity of gum, it is unlikely to see the huge spikes in growth witnessed over the review period. Consumers are increasingly switching from sugarised to sugar-free gum, in view of their rising health consciousness. In short, sugar-free gum in general and functional sugar-free gum in particular is set to provide the growth impetus over the forecast period.

Sugar Confectionery

TRENDS

The HKSAR Government continued its healthy living campaigns by highlighting the link between sugar intake and obesity and the importance of exercise in 2014. In particular, the Health Authority cited academic paper on the cause of obesity and sugar intake was the prominent factor among others. This government initiative further increased public health knowledge, consciousness and caution regarding diets. Against this backdrop, sugar confectionery was set to post a slower retail value growth in 2014 than 2013.

COMPETITIVE LANDSCAPE

Wrigley Co (HK) Ltd continued to lead sugar confectionery with its flagship brand Sugus spearheading the charge, flanked by Airwave and Eclipse in 2013 and 2014. This success sterns from the strong brand recognition among Hong Kong consumers regarding the company and its flagship brands. In particular, Sugus is a household confectionery brand that comes in a variety of packaging formats perfect for afternoon tea or gifting in Chinese New Year. Furthermore, constant marketing exercises throughout 2014 helped refresh consumers’ minds and improve sales. As the result Wrigley Co (HK) Ltd experienced the largest increase in value sales in 2013 and 2014.

PROSPECTS

Over the forecast period the government is expected to continue to campaign for a healthy lifestyle by reducing sugar intake and increasing exercise. Sugar confectionery is set to bear the brunt of this heath agenda due to its sugar content. Growth will slow down despite constant innovation by confectionery producers.